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11-17-2008, 10:13 PM
| | Junior Member | | Join Date: Nov 2008
Posts: 1
| |  shall be paid by the by the person holding or receiving that property
What is the name of your state (only U.S. law)? Illinois
My mother in law has passed and in her trust it states that the estate should pay bills,costs and claims etc.. then continues
" except that amount, if any, by which the estate and inheritance taxes taxes shall be increased as a result of the inclusion of property in which I may have a qualifying income interest for life or over which I may have a power of appointment shall be paid by the person holding or receiving that property."
The issue is this, There are 2 daughters. One was to get the house, then they were to split the estate 50/50. The daughter getting the house, wants to value the house at $500,000. This will put the estate over the $2 million level thus causing estate taxes to be due on the overage, as well as additional fees to file the estate taxes.
A reasonable valuation would be $340,000 considering this market, but she still wants to raise the declared value to protect herself from capital gains in the future.
The point is, does the wording above specify that since the raised value of the house would push the estate over the $2 million level, is the daughter with the house responsible for the additional taxes?
Or does the daughter without the house need to pay half of these increased taxes.
Please help, this is causing much strife amongst the sisters and it has gotten to the point where they are not talking anymore
Thanks  |
11-18-2008, 01:03 AM
| | Member | | Join Date: Mar 2002 Location: oregon
Posts: 667
| | | The house needs to be appraised by a licensed appraiser. It is the only way that it can be valued. You can't just stick an arbitrary value on an asset and expect the IRS and all beneficiaries to be satisfied. What is the reason to worry about capital gains? Is it going to be a rental? When is it going to be sold? Who is going to live in the house?
Last edited by curb1; 11-18-2008 at 01:06 AM.
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11-18-2008, 10:04 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 5,018
| | | You need an appraisal on the property. Snippets of the trust are not able to be used, one needs to look at the trust as a whole. However, the wording does not seem to be related to an asset like the house, but to an annuity-type arraingement.
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